How do I find people for my real estate syndication?

Commercial Real Estate Investing
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How do I find people for my real estate syndication?

Branden Yang
Member since 2022 · 42 posts · 10 votes

I was trying to find people around my area or out-of-state, but I don't know where to look for investors that'll invest in my deals. Currently, I need to raise 500k in 20 days, and I would have 100k from my partner. How do I raise the other half?

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Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
4y

@Branden Yang

You cannot just go out and raise money from passive investors unless you want to have your state securities board knocking on your door.

You need a securities attorney and $20k to do a regulation D 506c or 506b offering. Your attorney will put a PPM, subscription docs and file proper forms. I would say it would take 2-3 months to do your first PPM as you will have a lot of back and forth with your attorney on how to structure it.

For more info google those terms as well as the howey test.

Also the first question an investor with that much $ is going to ask is what is your track record and provide them with the PPM and a summary of your financial model.

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  • Taylor L.
    Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
    4y

    Are you doing a 506b? If so, you're limited to folks with whom you already have an existing relationship. Have you made a list of prospects and do you know their accreditation and sophistication status?

    For the future, the best thing to do is to dig the well before you're thirsty. Always be building investor relationships before you have an offering.

    3Reply
  • Branden Yang
    OP
    Member since 2022 · 42 posts · 10 votes
    4y
    Quote from @Taylor L.:

    Are you doing a 506b? If so, you're limited to folks with whom you already have an existing relationship. Have you made a list of prospects and do you know their accreditation and sophistication status?

    For the future, the best thing to do is to dig the well before you're thirsty. Always be building investor relationships before you have an offering.


    what are the types of syndication do I have to do?
    0Reply
  • Taylor L.
    Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
    4y
    Quote from @Branden Yang:
    Quote from @Taylor L.:

    Are you doing a 506b? If so, you're limited to folks with whom you already have an existing relationship. Have you made a list of prospects and do you know their accreditation and sophistication status?

    For the future, the best thing to do is to dig the well before you're thirsty. Always be building investor relationships before you have an offering.


    what are the types of syndication do I have to do?

     Are you working with a securities attorney?

    1Reply
  • Jayson Cain
    Lender · Manhattan Beach, CA · Member since 2017 · 423 posts · 268 votes
    4y

    @Branden Yang If you're going the syndication route, you might need more than 20 days to get your PPM ready and everything else that comes with a syndication. 

    If you can't extend the close of escrow, you can also partner with a few people through Joint Ventures which can be easily set up. 

    0Reply
  • Al M.
    Lender · Los Angeles, CA · Member since 2017 · 39 posts · 15 votes
    4y

    @Taylor L. that’s great advice!

    0Reply
  • Branden Yang
    OP
    Member since 2022 · 42 posts · 10 votes
    4y
    Quote from @Jayson Cain:

    @Branden Yang If you're going the syndication route, you might need more than 20 days to get your PPM ready and everything else that comes with a syndication. 

    If you can't extend the close of escrow, you can also partner with a few people through Joint Ventures which can be easily set up. 


    Do you know anyone that I could partner with? I just need passive investors. I'm hoping that I can get this deal because it's worth a lot.
    0Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    4y

    @Branden Yang

    You cannot just go out and raise money from passive investors unless you want to have your state securities board knocking on your door.

    You need a securities attorney and $20k to do a regulation D 506c or 506b offering. Your attorney will put a PPM, subscription docs and file proper forms. I would say it would take 2-3 months to do your first PPM as you will have a lot of back and forth with your attorney on how to structure it.

    For more info google those terms as well as the howey test.

    Also the first question an investor with that much $ is going to ask is what is your track record and provide them with the PPM and a summary of your financial model.

    7e investments53 Reviews
    WebsiteView Page
    4Reply
  • Ronald RohdePro Member
    Attorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
    4y

    For that low of a raise, just do F&F joint venture. No one is passive, active partners each putting in $1-200k. 

    0Reply
  • Brock Mogensen
    Real Estate Syndicator · Milwaukee, WI · Member since 2018 · 1k+ posts · 907 votes
    4y

    Raising money is not easy.  Especially when you are still building your track record.  Friends and family is the easiest place to start.

    0Reply
  • Branden Yang
    OP
    Member since 2022 · 42 posts · 10 votes
    4y
    Quote from @Chris Seveney:

    @Branden Yang

    You cannot just go out and raise money from passive investors unless you want to have your state securities board knocking on your door.

    You need a securities attorney and $20k to do a regulation D 506c or 506b offering. Your attorney will put a PPM, subscription docs and file proper forms. I would say it would take 2-3 months to do your first PPM as you will have a lot of back and forth with your attorney on how to structure it.

    For more info google those terms as well as the howey test.

    Also the first question an investor with that much $ is going to ask is what is your track record and provide them with the PPM and a summary of your financial model.


    Well we are definitely going to make a huge amount of profits. The place is under rented, and the deal could probably be making 1-2 million.
    0Reply
  • Paul MoorePro Member
    Commercial Real Estate Fund Manager · Lynchburg, VA · Member since 2015 · 1k+ posts · 1k+ votes
    4y

    Hi @Branden Yang! You got some great advice above. As @Taylor L. said, I recommend building a program and putting together a long term strategy, but I know that does not help you now. I would recommend going to REIA meet ups in your area and try to find someone to partner up with you. You will get a lot more traction face-to-face than you will online with such a short time frame, etc. I also recommend you check out @Whitney Sewell's podcast The Real Estate Syndication Show. Good luck and happy investing!

    Podcast Guest on Show #533
    2Reply
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